The MoF proposes to freeze tax arrears/debts. This means it would temporarily cease collection of tax and late payment fines for those who have terminated their business activities for more than one year, due to actual dissolution of taxpayers (except for cases for splitting, merger or acquisition), and those who already had their business licence revoked.
Draft resolution on handling tax arrears to be submitted to Vietnamese NA
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The ministry also plans to relinquish late tax fees for taxpayers who were struck by natural disasters, fires, accidents or other force majeure circumstances.
Such exemption only applies to late payments not exceeding the paid value and the suffered damage, which the MoF estimated to be around 2.24 trillion VND (98.6 million USD) in total, as of the end of 2017.
In particular, tax debt exceeding the 90 days payment window accounted for more than 26 trillion VND (1.14 billion USD); overdue fines were more than 15.6 trillion VND (687.2 million USD); while irrecoverable tax from deceased or incapacitated people accounted for over 31.4 trillion VND (1.38 billion USD), up to 43 percent of total tax debt and 3.2 percent of total domestic revenue in 2017.
Meanwhile, the total amount of tax arrears, late payments and fines under the management of customs in 2017 was more than 5.4 trillion VND (237.8 million USD) - 70 percent of which is deemed irrecoverable - having increased by 23.5 percent from the end of 2016.
The combined amounts of tax loss under tax and customs agencies in 2017 amounted to almost half of the national tax debts.
Unrecoverable debt levels have been high in recent years, prompting tax authorities to implement drastic measures to speed up enforcement and recovery of tax debts.
In 2017, the entire tax branch scrambled to collect 44.7 trillion VND (1.96 billion USD) in debt, equal to 89.9 percent of outstanding tax debt from 2016.
According to the General Department of Taxation, the tax branch will implement changes in tax debts management in order to improve State budget’s revenues in 2018, by associating tax recovery with administrative reforms for taxpayers across all economic sectors.
In addition, the department will also review debts that are possibly no longer subjected to collection, thereby proposing appropriate remedial measures and reducing tax arrears.
